French drugmaker Ipsen SA has struck a deal to buy some oncology assets of its US rival Merrimack Pharmaceuticals Inc, for up to $1 billion.
The assets include Merrimack's key marketed product Onivyde for the treatment of patients with metastatic adenocarcinoma of the pancreas after disease progression following gemcitabine-based therapy, in combination with fluorouracil and leucovorin.
Under the terms of the agreement, Ipsen will gain exclusive commercialisation rights for the current and potential future Onivyde indications in the US, as well as the current licensing agreements with Shire for commercialisation rights ex-US and PharmaEngine for Taiwan.
The transaction also includes Merrimack's commercial and manufacturing infrastructure, and generic doxorubicin HCl liposome injection.
Under the terms of the deal, Paris-based Ipsen will pay $575 million cash at closing plus up to $450 million upon the approval of potential additional indications for Onivyde in the US.
Ipsen will fund the acquisition through existing cash and lines of credit, and expects the deal to close by the end of the first quarter of 2017.
Merrimack plans to return at least $200 million to stockholders through a special cash dividend and additional payments from future milestone payments.
''The acquisition of ONIVYDE represents a compelling strategic opportunity to further strengthen Ipsen's oncology portfolio while leveraging our US infrastructure and creating meaningful potential incremental growth and profitability. Pancreatic cancer is now the third leading cause of cancer-related deaths. It is an area that has had many drug failures and very few FDA approvals over the past two decades,'' said David Meek, CEO of Ipsen.
''The agreement to sell Onivyde and generic Doxil, and our decision to focus on MM-121, MM-141 and MM-310, conclude a comprehensive process that our board conducted to maximise value for stockholders and confirms the strength of our technology and the power of systems biology,'' said Gary Crocker, Merrimack's chairman and CEO.